The economic performance test generally requires that underlying activity generating the liability has occurred in order for the associated expense to be deducible. the statement is true
The All-Events Test for Timing of Deductions and Economic Performance According to the accrual approach, a taxpayer deducts or capitalizes an item once all the circumstances that establish a liability have taken place and the liability can be calculated reasonably accurately. Deductions for office supplies, credit card processing costs, tax preparation costs, and equipment and property upkeep are also available. Still, you can write off a portion of other company costs by depreciating them or amortizing them over a period of time.
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